Doesn't that just mean they don't lose money? You can still make money as a punter in that scenario?
The typical arbitrage in bookies (scalping I think they call it), hedges one bet against the other.
But in the case of the paper, as I understand it, they just take the bet unhedged for some reason. Which unlike most other forms of arbitrage is sustainable.
If you were buying commodities you would also need to sell the commodities, but since these pseudo-securities coalesce into money, they don't need to make the inverse trade to sustain their alpha-seeking fund.
With that difference aside, I'd say it shares many of the same properties of arbitraging, I don't know how translateable it would be to stocks, but many of those assets coalesce into cash as well, especially fixed income (at a much slower rate), and options (albeit in more complex manners).
I imagine that with the amount of new currencies that exist, a big part of the job is going to be moving currency of one form into another and essentially forming a new circuit, for example buying crypto with fiat to bet in a crypto sportsbook, and the selling that crypto to buy more fiat.
In essence there's also the risk of becoming a money launderer doing this, whether trading stocks, currencies or betting, it's a form of arbitrage and you are getting money from ???.
They are, however, finding opportunities where one bookie has odds much longer than others for the same outcome, and betting on that. This means they expose themselves both to the difference in odds and the outcome of the event, but opportunities are plentiful enough that on average it is possible to show a reliable profit in a few months, apparently.
What surprises me about this is that some bookies still offer odds out of line with others. The article mentions that they might do this to counterbalance the risk of large amounts of bets on another outcome, which makes sense. But! I was under the impression bookies placed bets with each other to even out those risks, specifically to avoid creating arb opportunities.